Greedy Public Workers and Fat Pensions? Try Again

There's been a spate of reporting and commentary attacking public workers for having lavish pensions that are bankrupting various states. CBS's 60 Minutes got into the act in December with a report (12/19/10) that was criticized for lionizing Republican New Jersey Gov. Chris Christie (obviously this came before his snow troubles) for his attacks on public workers (particularly school teachers).

The New York Times featured an article by Michael Powell on January 2 headlined "Public Workers Face Outrage as Budget Crises Grow." The piece focused primarily on these pension plans, some of which "dangle perilously close to bankruptcy." The article doesn't adequately explain why this is so, but from the headline and focus of the piece readers are left with the impression that unionized workers are getting cushy benefits. This is somewhat undercut later in the article, when it is noted, "A raft of recent studies found that public salaries, even with benefits included, are equivalent to or lag slightly behind those of private sector workers." That left one Times letter writer puzzled about why the focus was on workers' supposed perks.

One of the main criticisms of this kind of reporting, from CEPR's Dean Baker, is that it fails to account for the impact of the recession. Pension funds are invested in the stock market; a major downturn in the stock market would obviously affect the health of those funds.

The economist Dean Baker of the liberal Center for Policy and Economic Research takes greater issue with my report. He argues that the financial crisis was the original sin, as it caused the stock market to plunge, which in turn upended public pension finance. This, he argues, is the "major cause" of the pension problem.

Mr. Baker is a careful follower of the economy, but this argument may be too easy. In New Jersey, California and Illinois, to name three states, Democratic and Republican legislatures and governors repeatedly ignored their obligation to pay into the pension systems.

Which brings us to today's papers. The Washington Post and the New York Times both have articles based on a new Census report showing that pension funds experienced huge losses due to the stock market downturn. The Postexplains that states' revenue drops "resulted largely from the big investment losses experienced by state pension funds during the worst period of the downturn." The Times says much the same, in a piece headlined "Pension Fund Losses Hit States Hard, Data Show."

Which is another way of saying that critics like Dean Baker were right.

Activism Director and and Co-producer of CounterSpinPeter Hart is the activism director at FAIR. He writes for FAIR's magazine Extra! and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly (Seven Stories Press, 2003). Hart has been interviewed by a number of media outlets, including NBC Nightly News, Fox News Channel's O'Reilly Factor, the Los Angeles Times, Newsday and the Associated Press. He has also appeared on Showtime and in the movie Outfoxed. Follow Peter on Twitter at @peterfhart.

Which is exactly why privatizing Social Security is idiocy. Not only would it be bad for "social security", but it would be bad for the whole economy, because the whole economy would become less diverse and more susceptible to shocks. Now at least Social Security acts as a significant buffer to economic shocks by ensuring that a portion of the population has stable income.

This is pure crap all of it.
The shear weight of of the entitlement programs is collapsing upon itself and
because it is also dipped into constantly by politicians makes it even more destined
for failure. there is nothing FAIR in your reporting and the magnitude of unneeded
federal workers that suck off the public while they vote for politicians that regulate the
profit out of every private sector industry is KILLING this nation it's literally death by
thousands of regulations and the federal vampire workers should be nixed ASAP
so that at the very least they will know what it's like to be out of work for years at a time.
LIKE I DO. you IDIOTS.

A co-worker once asked me why, when the company we worked for was so profitable, were the raises kept so low and later frozen? Even though he was a Limbaugh fan he thought that workers should share in a corporation's prosperity.

The answer I gave that wasn't immediately apparent to him was that the profits were so high simply BECAUSE the wages were kept so low.

When we had layoffs some of the Limbaugh listening survivors gathered together to bemoan the terrible thing that had just happened. I accused them, Limbaugh style, of being liberal crybabies, jealous of the success of others, sure that the big shareholders would be celebrating the share price increase that would inevitably follow.

Getting rich from shares is the American Dream for Limbaugh fans. It doesn't have anything to do with working hard every day for a wage for people with that mentality.

Keep on eating that Limbaugh rat bait. Just don't complain to me when it makes you sick.

I think Rush would say(and has said) , is that no corporation,union,or government has promised you a rose garden.Or shall we say a comfortable retirement.In the past they did promise such things.What Gov Christie(and what a stellar job he is doing) is saying is…. those days are over.It was an illusion.Unfunded or underfunded.If that is do to stock collapses due to government foils or bad choices -so be it.It is what it is.You depend on institutions to support you at your own peril.Social security is doing well i hear on these blogs.Bull dootles!It has not a cent in the bank.It is IOUs banked on the backs of future generations.It is broke ,along with everything else.We have two choices.Take the bitter pill now, or push it off to later when it will be 10000x worse.We have a generation of people now who believe/ wick-foodstamps-section 8-welfare-Obama care- SS ,medicare, Fully funded public schools ,less than 50% paying into the tax base and all the rest is the way folks live now and fore ever more.Who will pay for it?The rich?Dont make me laugh.If the rich were emptied lock stock and barrel it would not pay the interest on the interest of the dept.Wake up everyone.We need to get back to work.Help each other.And that means removing government interference to recreating wealth.It is the only door that leads to a better day

U.S. corporations are set to report their most profitable fourth quarter on record as companies from Apple Inc. to Dow Chemical Co. feed the demand for iPads, soda and capital goods that\'s bolstering the economy.

Earnings per share for all Standard & Poor\'s 500 Index companies are expected to have risen about 20 percent to $22.05 for the three months ended Dec. 31, according to analysts\' estimates compiled by Bloomberg. Profits excluding the financial industry may have climbed 12 percent, forecasts indicate.

Technology and industrial companies paved the way for what may have been the strongest year for U.S. profits since 2007 and the best fourth quarter since Bloomberg began keeping the data in 1992. S&P 500 companies have already exceeded the average analyst profit estimate for six straight quarters, the longest streak in Bloomberg data going back to 1993.

The S&P 500 gained 13 percent in 2010, its second straight annual gain since the stock market collapse in 2008.

@ Doug & Jim
The list of profitable companies just makes my point they are the ones that
call for regulation on their own industry because they can afford it while the
up and comers get whacked out of competing. They lobby where others can't
afford to. This game is sowed up or rigged as senator Bennett let fly.
Church and state my butt what we need is the total separation of business
and state before the old guard Repubs and communist Dems sell the whole
nation down the new world order river.
I stand by my remarks because to have a sector of society that feels no pain
of the 20% unemployment (we all know the govt figures are fake) when they
are fed by us is unconscionable. The Govt. should by law have to emulate the
financial status of the private sector. That would only be fair.
I certainly do not side with my screwers I just want open competition to keep
the big from monopolizing everything. And I want Govt. off my back.

My mistake, Joe. I took you for a working stiff. I see you are, or aspire to be, an "entrepreneur"?

If so, it appears you're about to get your wish for the gummint to be "off [your] back", if your heroes in the new Congress get their way.

Which may be distinctly to your liking. You won't have to worry about paying your employees a decent wage, or what you put in your products that's harmful to public health or the environment, or paying your fair share for the infrastructure gummint built that your business will depend on.

Or perhaps I'm off here. Maybe you're going to do all those things voluntarily, because that's how your momma raised you. If so, good on ya.

But what about all those other business boys and girls? How many of them will do right by the rest of us, and how many will make Gordon Gekko proud?

For me, that pressure impinging upon my testicles is courtesy of "the invisible hand of the market", and I want some countervailing force to loosen its grip. That's what gummint's for, as abysmally as it currently does it job.

Now, the only way to completely eradicate its hold on my sensitive parts, and everyone else's, is to end this zero-sum system based on profit.

I guess that'd label me a "communist" in your vernacular, and I wouldn't argue with that, although I likely have a differing definition of the term.

Mine springs from that whole Golden Rule thing, so you might call me something else, though to be clear, I don't believe in fairy tales, as inspiring as they can be.

I fall far short of my ideal, but I try, and if enough folks did – and many do, though not nearly enough – we'd have a shot at surviving the shit's that hitting the fan.

So I'll put my faith, if not my optimism, in solidarity and cooperation, and you can put yours in individualism and competition.

@ Doug
I've been a working stiff/entrepreneur back and forth for 30 years and I take offense
to your implying I would ever under pay anyone for their work but that said how can
you offer any better or raise a wage for diligence if the Govt. doubles the cost of the
employee? it's wrong it's robbery and it ties my hands behind my back.
right now I'm sitting on 3 small business plans for different products that could easily
employ 15 people each just to start and expand as they grow. Not in this environment
I'd be insane to even attempt a start right now. So I'll just do what I can to get by for now.
The ethics of business is the very issue and how wonderful of you to borrow from biblical
truth the golden rule to apply some ethics to guide businessmen and transactions. If your
interested I could show you many more from both old and new testaments that would literally
change the face of commerce for the better of all in this nation but that might make you unpopular
with the other atheist comrades of yours.

As for Bobert and my underfunding of the education department thanks for the expletive
Richard Cranium but I've done my part and have 3 in college right now.

Joe, a few points, and then I'll head off to pastures new, as I think we're just talking past each other.

As I said, perhaps you would try to be ethical, but only a blind person (and deaf and dumb, literally) doesn't see what happens when capital is allowed to do as it pleases. If one of your kids had been harmed by a company's wilful negligence, I think your attitude would be different. And someone's child is being harmed, or killed, every second of every day in this country and around the world by greedy bastards who only value humanity for what they can squeeze out of it.

The honor system doesn't work with these criminals, and you need a cop on the beat to deal with them. Tragically, that cop is largely on the take, and his complicity results in destroyed lives and a dying planet. We need him to do his job, and the ones responsible for his being necessary should bear the lion's share of the cost of him doing it, as well as suffering the consequences when he does.

So blame them for creating whatever legitimate problems you might have, and blame a government that adds to that cost, not by doing its job, but by being grossly negligent in not doing it.

Can you say "bailout"?

But again, it comes down to profit being about winners and losers. Even if everyone were trying to play fair, it's impossible to do so. If I, trying to do right by my customers, sell at a cheaper price than you, I'm costing you business and harming you and your employees.

That's the essence of a competitive system. It's why you don't play for a tie in sports.

And that's why only a cooperative system can be a fair one.

You don't buy that, I know. I just think the point can't be stressed enough.

Lastly, on the whole WWJD thing:

Fictional or not, the story is the guy didn't have a Roman coin to his name, walked around talking about loving your neighbor and treating other folks like you'd want to be treated, chased some "businessmen" out of his daddy's house (the only time he ever got seriously pissed), and ended up nailed to a cross for his trouble.

He didn't have a business plan. He wasn't concerned with balance sheets or profit margins. He just gave a damn about humanity.

And yet somehow he's become the unwilling pitchman for a system dedicated to the desecration of the very ideals he died for.

Doug
Good luck to you man you've argued yourself into quite the sad
belief system. In my world He died to set men free and rose again
to prove the power therein. Then He asked merely that I know Him
and I do to claim the inheritance that He purchased with His life.
Belief buys a lot. Too bad there's so much bad out there.

Joe, Sorry, but your opinions are as your name, MUDD. We as a nation will never get out of our problems with the "free market", which got us into the mess. Not to mention the fact the $3 trillion from the hated gummit bailed out banks and businesses in spite of their failure and the hurt put on the rest of us.

The fact that business has succeeded for so long was due in part to the infrastructure that government put into place. Look at the highway system planned and built by government through its use of private business. Notice I said use, not in competition with. In the 60s much of the scientific research was done by government, but today it is done by business and what do they emphasize in their research? A market based system of research which lays profits squarely in the forefront of business activity, not in knowledge for its own sake, but whether they can make money on it. That is, sad to say, what government getting out of the way for business looks like. Making money is the prime goal of corporations,(unlike Salk who could have made a lot more money gave his vaccine to the world) and people, environment, wildlife, and anything else be damned. Government should be there to monitor these guys, for they do not care!!Sadly people get hurt when they do not do their job, i.e., BP gulf oil spill.

During the Congressional meeting about tobacco years ago, each one of the CEOs of the individual tobacco companies said that smoking does not cause cancer. Tell that to the 500,000 people who die every year from cancer attributed to smoking. And remember Boehner in the chamber going around giving checks from the tobacco lobbyists to lawmakers. That is business manipulating government.

Oh and by the way:
If JC were here you would probably hate him as a communist liberal because most of what he taught was along the lines of what a liberal believes.

In what way am I free because of JC dying? When is the last time that you have seen someone who has died come back to life? It does not happen and no proof he was god. Why would you believe that it could happen?

It is rather a feeble notion that if all I have to do is "know him," that somehow that will magically do something then we are all in trouble. Not to belittle your beliefs, but, though it isn't new, I believe in the Flying Spaghetti Monster, prove to me that he doesn't exist. I firmly believe it and I don't have to show you any proof, it is my belief. That is your argument.
Another thing, if your god is a jealous god, why does he have to say so? Unless he were in competition, meaning that there are other gods and he has to show that he is not like them. And you can't have any other gods before him, same argument. He is not in competition with human beings, it is other gods. Though there aren't any today to speak of, at the time the bible was written there were gods everywhere. Norse gods, Roman gods, Greek gods. Though you might say that, yes, but history shows that the one true god prevailed, so it must be true. The prosyletizing done by Christians, particularly evangelicals is rampant and has been throughout history. I don't suppose that during colonialism around the world, that the missionaries had anything to do with spreading the nonsense found in the bible. That is just malarkey based on a bronze age bible that has no science in it, and was written in part based on the Pagans before it and somehow you have been manipulated into it. Don't be mad, Joe, I love you like a brother but your arguments don't hold water.

I am in agreement with all that Doug Latimer says and, Joe, if you cannot see the truth of it, that is amazing. He showed evidence for what he said in logical argument form. Why is it that we can see the sky and see that it is blue and agree on that, but when other things that are true, we see something different, at least one of us does where you are concerned.

Joe, if you give a shit about other folks, and see that those who control this world, and their antecedents, have shit on us since time immemorial, then I guess that is "sad".

I don't find anything sad in trying to be a mensch, though – only in the inevitable frustration engendered by the restraints those in power place on my ability to do so, as well as the limitations of my own courage.

And I don't see anything sad about wanting a world where all persons have dignity, and the material necessities to live a decent existence.

That to me is the purpose of our short time on this rock, and I hope that, when my time's up, I'll be able to say, "Stick a fork in me. I did what I could, and I'm done."

I think that's what Christianity is about, but beyond that, it's what every truly moral code demands from us – that we care about each other, and that we show that love, if you'll allow me that term, by how we try to create a just world.

For believers, of whatever faith, what you do here matters. The Golden Rule and its parallels in other religions aren't suggestions. They're commands, ignored at your eternal soul's peril.

"All fall short of the glory of (somebody's) god", but salvation's in the striving, it seems to me.

I doubt any of this has had the least impact on you, but maybe someone else has gotten something out of it. I hope so, and I hope they can take the gist and do a helluva lot better job of expressing it than I can.

[…] is a lot of money. But over what period of time? And is that figure correct in the first place? Dean Baker at the Center for Economic and Policy Research wrote a great paper (2/11) explaining the origins of […]

[…] is a lot of money. But over what period of time? And is that figure correct in the first place?Dean Baker at the Center for Economic and Policy Research wrote a great paper (2/11) explaining the origins of […]